President Donald Trump’s distinctive approach to international relations, exemplified by his successful re-negotiation of NATO defense spending, presents a compelling blueprint for tackling another critical domestic issue: the soaring cost of prescription drugs in the United States. His previous administration demonstrated how strategic economic leverage can compel wealthy allies to bear a fairer share of global responsibilities, a tactic that could be effectively reapplied to the global pharmaceutical industry.
Just last month, European leaders finally capitulated to President Trump’s persistent demands for increased defense contributions, agreeing to significantly raise their spending. For nearly two decades, these nations had resisted substantial hikes, despite successive U.S. administrations privately and publicly urging greater contributions to the West’s collective security. This historical breakthrough underscored the effectiveness of a direct and assertive foreign policy.
President Trump’s refusal to accept the status quo, utilizing ongoing trade discussions and the looming threat of economic repercussions, ultimately forced European members to abandon their “freeloading.” They committed to a new target of 5 percent of members’ GDPs for defense by 2035, more than doubling the prior 2 percent goal. This landmark agreement represents a monumental victory for American taxpayers, who had long borne the disproportionate burden of Europe’s security.
This same “hard-charging approach” offers a clear pathway for President Trump to address the long-standing issue of foreign countries free-riding on America’s vital biotech sector. Globally, many wealthy nations implement various mechanisms, including stringent price controls, rationing, and deliberate bureaucratic delays, to artificially suppress what they pay for cutting-edge medicines. This practice unfairly shifts the financial burden of research and development onto the United States, which accounts for the vast majority of global biopharmaceutical profits.
These foreign nations employ sophisticated non-tariff trade barriers to minimize their drug expenditures. Many Western European countries, for instance, utilize “international reference pricing,” wherein they peg their drug costs to the lower prices negotiated by poorer, Eastern European nations. Others, like the United Kingdom’s National Institute for Health and Care Excellence, employ overly simplified and potentially biased health technology assessments to justify setting remarkably low prices on newly developed medicines, further eroding profitability for pharmaceutical innovators.
Beyond initial pricing strategies, some countries impose mandatory rebates and clawbacks that extract significant sums from drug manufacturers, as evidenced by France’s rebates exceeding $2 billion in 2024. Moreover, these nations frequently delay crucial decisions on medicine coverage for months, or even years, after a drug receives European Medicines Agency approval. This deliberate foot-dragging effectively allows patents to expire, reducing the time for companies to recoup their substantial R&D investments. There have even been discussions about decreasing regulatory data protection for new medicines, further undermining innovation.
Instead of implementing problematic “most favored nation” (MFN) pricing, which risks allowing foreign countries to dictate American healthcare policy, President Trump could replicate his NATO strategy. He could leverage America’s considerable economic power to demand that wealthy allies—including Germany, France, Japan, Canada, and Australia—commit to spending an equivalent share of their per-capita GDP on innovative medicines as the United States currently does. Such a commitment would inject tens of billions of additional dollars annually into the global drug development pipeline.
This strategic shift would not only accelerate the discovery and development of groundbreaking new medicines but also ensure a more equitable distribution of their associated costs. The increased global investment would likely lead to a gradual reduction in prescription drug prices domestically, as the financial burden is shared more broadly and prices incrementally rise abroad. This approach directly addresses the root cause of the imbalance in pharmaceutical funding.
Ultimately, President Trump’s proven negotiating tactics provide a robust blueprint for a better deal for American patients and taxpayers. By compelling allied nations to contribute their fair share towards cutting-edge pharmaceutical innovation, the United States can significantly alleviate its own healthcare cost burden while simultaneously reinforcing its leadership position within the global biopharmaceutical industry. This mirrors the successful effort to secure increased defense contributions, demonstrating a consistent and effective foreign policy strategy.
